The PG&E stealth measure

December 27, 2009

Is Pacific Gas and Electric trying to pull a fast one on California voters next November? Los Angeles Times business columnist Michael Hiltzik certainly thinks so, at least based on his Sunday column.

According to Hiltzik, PG&E is the major force behind a proposed state ballot measure, called Taxpayers Right to Vote, currently waiting certification for the November 2010 election. Presented as a way to ensure good government, the initiative requires a two-thirds vote by residents of a municipality to approve certain expenditures or borrowings. However, as Hiltzik is quick to point out, the measure only applies to those setting up or expanding a municipal electric utility.

According to state campaign finance records, PG&E is the sole sponsor of the Taxpayers initiative, having already spent $3 million of ratepayers’ money in publicity and promotion. The goal: Hiltzik suggests it’s nothing more than pure greed. PG&E wants to preserve its monopoly against public power agencies.

“The Taxpayers Right to Vote Act is a dagger aimed directly at a movement to enable municipalities to offer renewable green power to their residents in competition with private utilities,” writes Hiltzik. “Their fear today is that these municipal utilities will undercut them on pricing and steal their customers.”

One San Francisco county supervisor quoted in the article has called PG&E’s strategy “reprehensible.”

I have always found it interesting that PG&E were and are the big promotoers of solar power. Why would anyone endorse their competition? My only guess is that this will provide PG&E the opportunity to raise their rates and at the same time not having to spend any significant money to maintain their profit ratio. The bottom line would be an increase to their net proceeds. Thanks PG&E for watching out for us and your pocket book.

Just to provide another point of view…
I don’t believe that PG&E is allowed to use rate payer money to fund campaigns, therefore, I don’t think that part of the article is correct. They are probably using shareholder money to fund this campaign.

PG&E rates are set by the CPUC, so this isn’t going to give PG&E a free pass to charge whatever they want. Any rate proposals will still be highly scrutinized by the CPUC to ensure that PG&E isn’t ripping off its customers.

PG&E does have an incentive to promote clean energy. They are required to by law. PG&E is very interested in helping its customers use less energy through energy efficiency because it’s cheaper to incentivize using less energy than it is to build power plants to make more.

A state mandate requires PG&E to provide a certain percentage of power derived from alternative sources by a certain date. They’re somewhat behind on achieving that mix, but that’s only one reason they’re promoting solar and signing deals with solar providers (such as the Carrizo projects). The real reason is that they are a conservative, backward-thinking monopoly that sees building anything but fossil fuel fired or nuclear plants (with their massive public subsidies) as risky investments. At this point, they’d rather use their clout to push favorable legislation, increase solar subsidies and negotiate contracts. They also benefit greatly from the federal and state solar subsidies, without having to erect one panel of their own.